HARDWARE STORES

The philosophy of house brands on display in Boston

BY Ken Clark

Boston — Orgill’s Jim Wilson, VP of Worldwide Sourcing for the Memphis-based distributor, is philosophical about the role of house brands like MintCraft, Tool Basix and Vulcan.

"We’re doing this because it adds value and our customers tell us it’s a good thing to do," he told HCN during on the market floor of Orgill’s Boston Dealer Market here. "If this was no longer a value, we would exit these categories and lines, but I don’t see that happening  here or anywhere else in the retail environment."

In fact, Wilson said sales of the distributor’s private brands — including all-purpose MintCraft for items from sledgehammers to bicycles, and Boston Harbor for decorative lighting — are growing at a faster pace than Orgill’s overall sales.

Part of that has been the increase in the breadth of the Worldwide sourcing offering, but also market pressures. More credit goes to the program value than the individual brand names, he said. "The growth that we’ve seen is really from the value that we’ve shown in the process that we source products," Wilson said.

The value is on full display here at the Boston Orgill Dealer Market show floor, where "Dare to Compare" signs show the price advantage of various Orgill-brand products in head-to-head competition with those of national retailers — with actual receipts from Lowe’s and Home Depot 

The growth of Orgill’s worldwide sourcing division comes purely on the merits of the products, Wilson said.

"We don’t force any of our customers to buy any of our sourcing products," Wilson said. "And there’s no additional incentive for our salesmen to sell any of our sourced products." 

Along with MintCraft and Boston Harbor, Orgill’s brands include HomeBasix, ToolBasix, Diamondback workwear, Power Zone commodity electrical products and Vulcan tools.

Wilson added that national brands are and will remain crucial to the success of Orgill and its customers. "We could not exist without our manufacturer partners who provide the products and our brands to our dealers," he said. 

Still, private label is evolving and will most likely continue to shape the retail environment. 

The balance of private label at retail is a deep and important question. "As to where this all going, it’s kind of like Philosophy 101," Wilson said. "It’s changing the complexion of the retail environment and it’s exciting to watch it happening."

 

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Market delivers tips to improve price image

BY Steph Koyfman

Boston — The phrase “price image” plays a key role in merchandising best practices, according to a seminar presented by Paul Ohrberg, Orgill’s Director of Retail Concepts.

The presentation, titled "Merchandising Techniques: Increasing Your Add On & Impulse Sales," covered merchandising techniques for dump bins, rolling racks, stackouts, counter displays, check out areas, queing fixtures, endcaps, clip strings, wing panels and specialty fixtures. 

Among the more prescient takeways was the golden rule of minding price image – that is, promoting aggressive pricing in highly visible locations as well as rotating promotional items frequently.

Ohrberg delivered the seminar Friday at the Orgill Fall Market, held at the Boston Convention and Exhibition Center. 

"You want to have a great price on an endcap or a power buy to promote the perception that you’re a low-priced store," said Ohrberg. "Some of you might have a lot of loyalty; customers who are there every day or week. People like to see change. Keep the store looking alive."

Ohrberg, who has years of retail experience under his belt working at Home Depot, lumberyards and various hardware stores, was partially responsible for the Cobblestone Hardware and Windsor Market concept stores, as well as the various product showcases on the Orgill floor.

Ohrberg highlighted the importance of using temporary dump bins, rolling racks, stack displays, main entrances, endcaps and checkout counters to promote a sense of urgency and stimulate impulse buys.

The presentation included some specific tips, including:

• limiting product selection for temporary dump bins, 
choosing items that can be stacked safely, 
displaying larger items at the main entrance to encourage the use of a shopping cart, 
using service counter displays to remind customers of something they may have forgotten, 
keeping checkout display items generally under five dollars; and 
using endcaps to promote new items with good price value.

"If you scare them away on price with the first thing they see, they’re going to think you’re an expensive store," he said. "Price image is key."

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Orchard Supply Hardware CEO to depart

BY Ken Clark

Moorsesville, N.C.-based Lowe’s said it expects to complete its West Coast acquisition of 72 Orchard Supply Hardware stores by the end of August. When that happens, current CEO Mark Baker will be replaced at the helm of Orchard Supply by Lowe’s executive Richard D. Maltsbarger, the retailer announced yesterday.

Baker, a former Home Depot executive, took over the Orchard Supply job back in March of 2011. According to the press release announcing the move, Baker "informed Lowe’s of his decision to accept a position as president and CEO of the Aircraft Owners and Pilots association following the closing."

Before joining Orchard, Baker served as president and CEO for Scotts Miracle-Gro. Previously, Baker served in a variety of senior roles at The Home Depot during his seven years there, including executive VP merchandising. In addition, he was CEO of the Gander Mountain Co., an outdoor retailer, and has held senior leadership roles at Scotty’s Inc. and Homebase, Inc.

Maltsbarger led the Lowe’s team that worked on the acquisition of Orchard.

"We are confident that Orchard’s talented management team, led by Richard Maltsbarger, will continue to execute their successful repositioning strategy and deliver long-term profitable growth," said Lowe’s CEO Robert Niblock. 

Orchard will also lean on executive leadership from Steven Mahurin, chief retail officer and Chris Newman, CFO and head of development.

Lowe’s says that it intends to run Orchard as a separate, standalone business and keep its headquarters in San Jose, Calif. 

To acquire the California-based hardware-store chain’s 72 stores, Lowe’s will pay about $205 million, and also assume the payables owed to nearly all of Orchard’s supplier partners. The deal was approved by the U.S. Bankruptcy Court for the District of Delaware yesterday.

Lowe’s currently operates 110 stores in California, compared to Home Depot’s California store count of 223. According to Lowe’s, Orchard brings locations in "high-density, prime locations" and smaller, neighborhood stores that are expected to complement its big-box presence in the state. 

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